At 24:00 on October 23, the new round of domestic finished oil price adjustment window is about to open.

The market generally expects that this round of finished oil retail prices may welcome the ninth increase in the year. If the price rises, assuming a 70-liter fuel tank, private car owners filling up a tank of gas may spend around 4 yuan more.

Source: Autohome

Zhuochuang News oil analyst Gao Qingcui pointed out that at the beginning of this round of domestic fuel pricing cycle, due to the continuous escalation of the situation in the Middle East, international crude oil prices continued to rise, with Brent crude oil futures prices rising above $80 per barrel at one point. However, with the news of the Middle East situation cooling down in the market, concerns about a full-scale conflict in the Middle East and risks of oil supply disruption that the market had worried about earlier decreased. Coupled with expectations of declining demand, crude oil prices rapidly declined.

Oil prices are about to rise.

According to predictions from a domestic authoritative forecasting institution, by 24:00 on October 23, 2024, domestic finished oil prices are expected to rise, with diesel and gasoline expected to increase by 115 yuan per ton, equivalent to a price increase of 0.10 yuan per liter.

According to Zhuochuang News calculations, as of the close on October 21st, the reference crude oil change rate for the 9th working day in China was 2.06%. It is expected that diesel and gasoline will be raised by 90 yuan/ton, equivalent to increases of 0.08, 0.07, and 0.07 yuan/liter for 0 diesel, 92 gasoline, and 95 gasoline, respectively, with the price adjustment window closing at 24:00 on October 23rd.

If the current round of refined oil retail price limits are confirmed to be increased, based on the current calculation, private car owners will spend an extra 4 yuan when filling up a 50L tank of 92# gasoline, leading to a widespread increase of 8 yuan for 95 gasoline.

Looking back to early October, precisely on October 10 at 24:00, domestic diesel and gasoline prices were raised by 140 yuan/ton and 135 yuan/ton respectively. The latest news indicates that without any surprises, tonight (October 23 at 24:00), domestic fuel prices may face another increase.

Of note, since the beginning of this year, domestic refined oil retail price limits have experienced 20 adjustments, including 8 increases, 8 decreases, and 4 standstills. After the ups and downs, gasoline and diesel prices have cumulatively decreased by 75 yuan/ton and 70 yuan/ton respectively for the year. The result calculated by Longzhong Information shows that after this round of price adjustments, the refined oil pricing in 2024 will present a pattern of "nine increases, eight decreases, and four standstills".

Data source: National Development and Reform Commission

Continuous sharp drop in international crude oil prices

Despite the upcoming price hike in this round, international oil prices dropped significantly last week, laying a solid foundation for the next adjustment. The drop in international oil prices last week will be included in the next oil price adjustment statistics, setting the stage for a significant drop in the next round of oil prices.

At the same time, the three major institutions have successively released monthly reports, continuing to lower demand estimates, leading to a further cooling of market confidence in demand.

Source: COFCO Futures Research Center

Among them, OPEC has lowered demand outlook for both this year and next year, mainly due to the downward revision of China's growth rate. However, the long-term demand outlook is still significantly higher than that of EIA and IEA. The decision to increase production in December is still maintained regardless of actual demand, as oil-producing countries are considering their own interests, and a long-term trend of increased production is difficult to avoid.

EIA has lowered next year's demand expectations but raised supply expectations for this year. The supply-demand gap for 2025 has shifted from an expectation of shortage since July to an expectation of surplus, indicating that the supply-demand balance has gradually transitioned to loose amid long-term increased production and declining demand growth.

IEA has slightly raised its long-term demand expectations, but remains pessimistic for the current year, with the core factor also related to China's growth.

The three major institutions generally believe that the fourth quarter is still marginally improving with policy support, there is some potential for growth, but in the long term, as industrial demand transitions and electric vehicles replace traditional energy sources, domestic crude oil demand will be squeezed.

Industry insiders pointed out that the future trend of international oil prices will be driven back to the basic supply and demand fundamentals of the crude oil market.

OPEC and non-OPEC oil-producing countries (OPEC+) will start increasing production in December. The super typhoon "Milton" in the USA has put pressure on the US economy and employment. It is expected that in the later period, we may see a continued increase in the weekly initial jobless claims and a significant decrease in October.Non-farm employmentDomestic fiscal stimulus policies are waiting for further implementation, leading to a temporary weakening of the market's optimistic expectations.